Legal and Ethical Issues in E-Commerce

Major Legal and Ethical Issues in Electronic Commerce Privacy Intellectual Property Free Speech Taxation Computer Crimes Consumer Protection Miscellaneous

Legality vs. Ethics Illegal acts break the law while unethical acts may not be illegal Ethics Branch of philosophy that deals with what is considered right or wrong Right and wrong not always clear Consider Company sells profiles of customers with information collected through cookies Company allows personal use of Web but secretly monitors activity Company knowingly sells tax software with bugs

Privacy Issues Information privacy: claim of individuals, groups, or organizations to determine when and to what extent information about them is disseminated. Right to privacy is not absolute Public’s right to know superceded individuals right to privacy

How is private information collected? Reading your newsgroup postings Finding you in an Internet Directory/Database Making your browser collect information about you Recording what your browser says about you Reading your email Most common methods are cookies and site registration

Web Site Registration Cookies Must fill in registration to get to site Sometimes sold to third parties Cookies Help maintain user status A temporary passport Used for Customizing sites (Yahoo) Improve online services (Amazon) Collect demographics and usage statistics (Doubleclick) Protection Delete cookies Anti-cookie software

Five Principles of Privacy Protection Notice/Awareness Notice of collection practices prior to collecting information Choice/consent Consumers to be made aware of options and give consent Access/participation Must be able to access and challenge information Integrity/Security Must be assured data is secure Enforcement/Redress Government legislation or legal remedies

Principles of Safe Harbor Companies must tell consumers how and why personal data is collected and who it's shared with Consumers must be able to request their data not be shared Companies must provide notice and choice before data is given to third parties Consumers must have access to data about them and have the ability to correct mistakes Companies must take reasonable measures to protect data Personal data must be relevant to its intended purpose Procedures must be in place to settle complaints and resolve disputes

Intellectual Property Intangible property rights In E-Commerce Copyrights Patents Trademarks IP Rights are not absolute Perishable Legal exceptions to allow public use at a specific rate

Copyrights Protection Copyrighting Protects expression of idea – not the idea itself Expires after certain number of years after death of copyright holder Generally, contents of websites are copyrighted Copyrights Protection Digital Watermarks Embedded invisible bits in the digital content Cannot prevent copying but helps identify who is doing it Validation codes Activation or deactivation of software

Patents Grants holder exclusive rights on inventions for fixed time Trademarks Graphical sign used by business to identify their goods and services Type of IP Must meet criteria of distinctive, original, and not deceptive Domain names can be trademarked if they meet above criteria

Spamming Indiscriminate distribution of messages without permission of receiver Other Issues Consider on your own Electronic contracts Online Gambling Validity of electronic documents Time and date on documents across borders Which country has jurisdiction over E-Commerce transaction Can web site link to another without permission Example Ticketmaster vs. Microsoft

What is M-Commerce? Also known as pervasive computing E-commerce done in a wireless environment Any transaction with a monetary value that is conducted via a mobile telecommunications network.

Other Drivers of E-Commerce Widespread availability of devices No need for PC Cell phone culture Vendors push Declining prices Improvement in bandwidth E-commerce growth in general Digital divide (more cell phones in developing countries)

Obstacles to M-Commerce Usability issues Effectiveness, efficiency, satisfaction Lack of standardized security protocol Insufficient bandwidth Transmission limitations GPS does not work in cities with skyscrapers Power consumption Wireless and Health hazards